As more trucks find their way into the secondary market, capacity is becoming a major issue for used truck sellers, J.D. Power confirmed Friday in its May 2023 Commercial Truck Guidelines industry report.
Within the auction market, volumes were down in April compared to March but remain historically high as excess trucks are offloaded
Among 3- to 7-year-old trucks, J.D. Power says its average benchmark truck pricing was:
- Model year (MY) 2021: $102,000; $15,000 (17.2%) higher than March
- MY 2020: $59,729; $4,588 (7.1%) lower than March
- MY 2019: $46,981; $3,430 (6.8%) lower than March
- MY 2018: $32,371; $3,997 (11.0%) lower than March
- MY 2017: $24,924; $532 (2.1%) lower than March
J.D. Power says the substantial swing in model year 2021 price is due to low volume: "This month’s result is probably more representative of actual market conditions." Overall, the company says late-model trucks averaged 8.0% less money in April than March, and 48.5% less money than April 2022.
In the first four months of 2023, late-model sleepers are down 47% from the same period in 2022. Monthly depreciation in 2023 is currently tracking at 5.8%. J.D. Power says the newest model years available in the marketplace are bringing about 20% more money than the strong pre-pandemic period of 2018, assuming average mileage per year. J.D. Power adds if adjusting values over time to 2023 dollars, that difference drops to parity.
"Four-year-old trucks continue to cycle through auctions in substantial numbers. Most of these trucks are off-rental units with extremely high mileage. Our averages adjust for mileage, but trucks of this age with lower mileage are bringing stronger money," the company adds.
Within the retail sector price was more static, though volume remains frustratingly low.
J.D. Power says the average sleeper tractor retailed in April 2023 was 68 months old, had 441,050 miles and brought $74,621. Compared with March, this average sleeper was one month older, had 14,456 (3.2%) fewer miles and brought $1,481 (1.9%) less money. Compared with April 2022, J.D. Power says this average sleeper was five months newer, had 7,632 (1.7%) fewer miles and brought $36,682 (34.1%) less money.
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The company says April's average pricing for two- to six-year-old trucks was as follows:
- MY 2022: $112,721; $23,050 (17.0%) lower than March
- MY 2021: $114,167; $2,402 (2.1%) higher than March
- MY 2020: $84,748; $2,237 (2.6%) lower than March
- MY 2019: $69,336; $801 (1.1%) lower than March
- MY 2018: $55,051; $6,576 (10.7%) lower than March
Within the large 3- to 5-year-old cohort, trucks brought an average of 0.2% less money than March, and 35.2% less than April 2022. The first four months of 2023 averaged 28.0% less money than the same period of 2022. Additionally, J.D. Power says monthly depreciation in 2023 is currently averaging 4.2%.
"Late-model sleepers are bringing about 19% more money than the last strong pre-pandemic period of 2018, assuming average mileage per year. If we adjust values over time to 2023 dollars, that difference is slightly below that 2018 peak," the company reports. "The substantial decrease in the model-year 2022 average is due to a large group of one specific model selling for unimpressive money which artificially affected the average. Actual market conditions are not as bad as that figure might suggest."
On a segment basis, J.D. Power notes day cabs continue to hold value "substantially better than sleepers in 2023." The company will have more data on that segment next month.
Volume was steady in April as well, averaging 2.5 trucks, 0.1 truck less than March.
In the medium-duty market, pricing was back down in April after stronger March due to higher volume.
Class 3-4 cabover pricing in April averaged $24,204. This figure is $3,157 (11.5%) lower than March, and $8,032 (24.9%) lower than April 2022. In the Class 4 conventional market, was $38,205 in April, $90 (0.2%) higher than March, and $9,492 (19.9%) lower than an unusually strong April 2022. Class 6 conventional market, pricing averaged $36,571 in April, $4,939 (11.9%) lower than March, and $21,554 (27.5%) lower than April 2022.
In its outward forecasting, J.D. Power says excess capacity created from 2020 to 2022 continues to cycle through the markets.
"The industry still has a substantial volume of trucks to 'burn off' before pricing will stabilize, and end users are facing a substantially tougher credit environment. Assuming freight conditions remain stable, we see this stabilization starting to take shape later in the summer," the company says.
For more information, and to read the entirety of this month’s report, please CLICK HERE.